The document outlines a demand savings analysis for solar plus battery projects, emphasizing the financial implications of combining these technologies. It discusses how such installations can reduce electricity bills by minimizing both usage and demand charges, with case studies illustrating potential savings. Additionally, it highlights the importance of performance data in projecting savings and the effects of solar intermittency on demand charges.

1. Demand Savings Analysis
Solar + Battery Projects
what we have learned from our operating portfolio
and
how to stress test financial models using performance data
Ali Chehrehsaz
Dan Rosenberg

2. there is a lot of excitement in the
battery storage market!

3. behind the meter battery
installations are expected to
provide electricity bill savings by
reducing electricity demand
charges

4. additionally, solar plus battery
storage installations are expected
to provide more savings by
reducing both usage and demand
charges

5. as battery storage is a new
market, there are varying
methods in projecting combined
solar plus battery storage
installations

6. this presentation describes how
TerraVerde projects demand
savings from battery installations
when paired with a solar
installation by relying on
performance data from our
operating portfolio

7. we will first start with background
information and work our way
through a case study

8. to assess the savings projection,
we first need to understand how
an electricity bill is calculated

9. electricity costs are calculated
based on the rate schedule
applied to each utility electricity
meter

10. the rate schedule is primarily
determined by the usage profile
measured by the meter

11. rate schedule = func(usage profile,
customer type,
voltageinterconn,
etc.)

12. the usage profile is the measure
of how fast, how much, and time
of use of electricity

13. to better understand all the
details involved in a rate schedule
you will need to thoroughly read
the documentation provided by
the electric utility

14. the next slide shows the
Southern California Edison TOU-
GS3 rate schedule and all the
components that need to be
factored into calculating the
electricity bill

16. the rate schedule components
can be summarized into three
categories:
• Usage or kWh charges
• Demand or kW charges
• Fixed charges

17. the ratio of three categories for
the building in our case study are
shown in the following pie chart

19. usage charges are the sum of
total electricity drawn from the
grid and measured in kWh

20. demand charges are calculated
based on the maximum demand
for each month measured in kW
during any 15-minute interval

21. fixed charges are the sum of
non variable costs including meter
costs

22. now that the basics of an
electricity bill are covered, let’s
jump into the analysis

23. this presentation will walk
through the following three
savings analysis for:
• solar only savings
• battery only savings
• solar + battery savings

24. let’s start by showing a block
diagram of typical behind-the-
meter solar installation

25. PV modules inverter
switchgear
utility meter
electric grid
school

26. the graph on the next slide
shows the solar production and
building load profiles for a typical
school day

27. solar production
building load without solar
building load with solar
electricity delivered to grid

28. the building load reduction plus
the excess solar production
delivered to the grid results in
electricity bill savings which are
shown on the next slide

30. as shown on the last slide the
solar installation is capable of
reducing the entire usage (kWh)
charges of the electricity bill

31. solar installations are also able to
reduce the instantaneous building
demands, however demand (kW)
savings are not accounted in
savings projections due to
intermittent nature of solar
production

32. why does the solar production
intermittency risk prevent
accounting for demand savings?

33. remember, demand charges are
calculated based on the
maximum demand (kW) for each
month as measured during any
15-minute interval

34. therefore, temporary cloud
coverage during a typical
operational day that reduces solar
production would result in a
demand spike measurement on
the utility meter

35. since the utility bills for demand
charges for the one time highest
15-minute interval per month, the
load spike during the could event
would set the maximum demand
for the month

36. back to the bill, the next slide
shows the electricity bill pre and
post solar

38. if all assumptions hold, the
electricity bill would be reduced to
$35,295 (sum of kW charges and
Fixed charges) per year for the
life of the solar installation

39. unfortunately, the kW charges
are expected to increase and as a
result the post solar electricity bill
will continue to increase

40. the next slide shows the growth
of the kW charges in SCE territory
for a sample of the rate schedules

42. to reduce the impact of kW
charge increases and provide
additional savings on the
electricity bill we will look to
battery storage systems

43. before we see how a battery
system complements a solar
system, let’s first look at a stand
alone battery system

44. the next slide shows a block
diagram of a behind-the-meter
battery installation

45. inverterbattery packs
switchgear
utility meter
electric grid
school

46. the graph on the next slide
shows the charge/discharge and
building load profiles for a battery
installation

47. battery discharging
battery charging
max demand pre battery
max demand post battery

48. the building max demand
reduction per month results in kW
charge reductions as shown on
the next slide

50. the electricity bill savings as a
result of demand reduction is
shown next

52. as shown on the last slide, the
kW charges are reduced by
$5,031 on an annual basis

53. you may have noted a small
increase in kWh charges; the
increase is due to round-trip
efficiency losses of the battery

54. we have now covered the basics
of stand alone behind-the-meter
solar and battery installations

55. let’s get into the exciting portion
of the presentation and show
what happens when solar and
battery installations are paired!

56. again, we will start with a block
diagram

57. inverterbattery packs
switchgear
utility meter
electric grid
school
PV modules inverter

58. and next is the demand and
usage profiles of the same
building for the same day; scroll
back up to compare the profile
differences

59. solar production
max demand before solar + battery
max demand after solar + battery

60. the next slide shows the
reductions in kWh and kW
charges as a result of solar and
battery installations

62. you may have also noticed in
reduction in Fixed charges which
is due to rate schedule change

63. in this scenario, the combination
of solar and battery installations
result in sufficient demand
reduction to allow the building to
switch from a GS3 to a GS2 rate
schedule which has lower Fixed,
kW, and kWh charges

64. the next slide shows the
electricity bill savings from solar
and battery combination in
comparison to previous scenarios

66. the savings exhibit a compelling
argument for pairing solar with
battery installations

67. the remaining electricity bill is a
fraction of the original bill

68. while the opportunity and cost
savings look attractive, it is critical
to explore the assumptions
behind the savings projections

69. a key assumption explored in this
presentation is the intermittent
performance of solar installations
and the impact on battery
demand reduction

70. when projecting demand
reductions in solar plus battery
installations, the model assumes
typical year solar production

71. the typical year solar model for
this scenario would result in
monthly demand reductions
ranging from min 5% in
December to max 66% in April

72. that means solar production
without the help of a battery is
capable of creating demand
reduction and therefore kW
charge savings, if typical
performance is realized per
models

73. this is a highly optimistic
assumption which we are able to
modify based on the performance
data from our portfolio of
operating solar installations

74. the data presented is collected
from the operating solar
installations managed by
TerraVerde

75. the boxplot on the next slide
shows the percentiles of max
demand reduction, by month, for
all of our portfolio sites

76. Boxplot range represent 0th, 25th, 50th ,75th , and 100th percentiles

77. the following slide shows the
same data but the sites are
grouped by portfolio of financed
projects

78. Boxplot range represent 0th, 25th, 50th ,75th , and 100th percentiles

79. as shown from the last slide, the
range of the average demand
reduction gets much smaller
when a portfolio of installations
are evaluated

80. the upcoming slide shows how
much maximum demand
decreases, depending on the
hour when it occurs

81. Boxplot range represent 0th, 25th, 50th ,75th , and 100th percentiles

82. the following slide shows what
time of day maximum demand
occurs with and without solar

83. 0%
5%
10%
15%
20%
25%
30%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
Frequency
Hour
Solar Shifts Time of Demand
Without Solar With Solar

84. as seen on the previous slides, a
solar installation is capable of
reducing and shifting peak
demand

85. the following slide is a heat map
showing the expected reduction in
demand based on the month and
hour it occurs

86. Month
1 2 3 4 5 6 7 8 9 10 11 12
6
7
8
9
10
11
Hour 12
13
14
15
16
17
18
19
20
Spring Afternoon
Average Demand Reduction Percentage
0% 47%

87. the peak demand reduction due
to solar generation in our portfolio
ranges from
@25th Percentile 5% to 32%
@50th 8% to 39%
@75th 9% to 43%

88. as shown in the last slide, the
peak demand reduction observed
from operating solar installations
is lower in most months than the
modeled values based on TMY
data

89. therefore, to avoid over-
estimating savings, we apply the
25th and 50th percentile limits to
the post solar demand profile
prior to testing the peak demand
reduction using a battery
installation

90. the next slide shows the
reduction in savings from the
theoretical scenario assuming
perfect solar performance per
TMY data

92. as seen above, the residual
electricity bill for the 25th
percentile scenario is increased
by $4,532 per year (43%) as
compared to the TMY model
savings

93. the reduced projected savings
from the combined solar and
battery reduces the return on
investment for the project

94. while the reduced ROI is less
attractive, it should be treated as
a sound stress test of the financial
models and part of the due
diligence process

95. in closing, we would like to
remind you that the data
presented here are from our
operating solar portfolio with a
system uptime of >99%

96. additionally, the portfolio
presented is specific to California
public school districts in various
climate zones

97. to perform a stress test on the
financial return of solar and
battery installations the analysis
must be based on dataset
collected from applicable
buildings in similar climate zones

98. finally, we need to emphasis for
simplicity of presentation, we
omitted to highlight other benefits
of combined solar and battery
installations including
charge/discharge arbitrage and
Demand Response opportunities

99. About TerraVerde Renewable Partners
Since 2009, TerraVerde has been California’s leading
independent solar energy advisor
Recognized leader in project development consulting
services in Energy Efficiency, Solar, and Energy Storage
Unique engagement model mitigates project risks during
development
In house engineering, structured finance, financial
modeling, Design-Build & PPA contracts, owner’s
representative project management, and Asset
Management
Completed the first solar plus battery storage school project
in California for Burton City Schools in Porterville and
several more under installation and development
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100. Contact Information
Ali Chehrehsaz, EVP Operations
TerraVerde Renewable Partners, LLC
1100 Larkspur Landing, Suite 155
Larkspur, CA 94939
Ali.Chehrehsaz@tvrpllc.com
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